There are two types of title insurance. Mortgagee title insurance is title insurance insuring an entity (bank, mortgage company, individual) who has a mortgage on the property and this title insurance insures that their lien is a first lien. Most banks and mortgage companies require that a purchaser obtaining a mortgage purchase mortgagee title insurance. This policy alone offers no protection to a property owner. Such protection is only available if an owner’s title insurance policy is purchased. Title insurance companies in New York State make it possible for you to buy owner’s title insurance on the day of your closing, for a reduced fee called a simultaneous rate. Unlike other forms of insurance, you pay for an owner’s title insurance policy in a single low cost premium. It is not paid yearly, but the lone payment insures you for as long as you own the property. Please also note that title insurance premiums are set by the New York State Department of Insurance and are therefore the same throughout the State for every company. For an additional small fee you may also be able to purchase a “market value rider” which increases your coverage for any increase in the market value of your home.
The decision to purchase owner’s title insurance is an important one and should be discussed with your attorney so that a buyer of real property may be able to make an informed decision.